Friday, March 25, 2016

FULL FAITH

In Marco Rubio’s last debate, he got into an exchange with
Donald Trump about Obama Care. Both men were critical of the Affordable Health
Care Act, and both asserted that it should be summarily repealed and replaced.

But what exactly Mr. Trump would replace it with, became a
point of difference. What he did say was that people should be able to purchase
health care across State lines.

Being a businessman, Trump, I am sure, believes that
competition among insurance carriers will bring down the premiums. That rather
simple statement prompted the old judge to do some homework.

To begin with, I must confess that I am not one of the eight
or nine people in the United States who have actually read the 2,700 words of
the Affordable Care Act or the 11,588,500 words of administrative regulation
that have been adopted to explain, enforce and expand Obamacare.

And I don’t intend to start now. Still, I think there is
merit in going back to basics. So let’s start with the United States
Constitution. Article IV, Section 1 says this:

Full Faith and Credit
shall be given in each State to the public Acts, Records, and judicial
Proceedings of every other State:

So let’s start by asking the simple question, Can an
insurance company chartered under the laws of one state and subject to the
jurisdiction of that state’s insurance commission, sell insurance to the
residents of another state?

We know that some things a State does carry across state
lines. Citizens of Michigan and Ohio used to go to Kentucky to get married
because Kentucky law allowed girls to marry at age 16. Many years ago, Nevada
developed a brisk business in divorce and marriage by its liberal legislation.
In both of those instances, the marriages were recognized in the home states of
the parties because of Article IV, Section 1.

My Michigan driver’s license will satisfy the Georgia State
Trooper who pulls me over on I75.

Still, there have always been other areas in which a
different rule applies. A person admitted to the Bar in Illinois cannot
practice in the courts of Indiana. A physician licensed in Utah cannot open an
office in Colorado. A company licensed to construct homes in Florida can’t
build houses in Georgia without getting a Georgia builder’s license.

On the other hand, a corporation formed in one state must be
recognized in every other state. Delaware, for example, has long been a
preferred state of incorporation. The Diamond State makes it quick and easy to
form a corporation, and many companies incorporated there actually do no
business in Delaware, and maintain their offices elsewhere.

Electronic communication tends to obscure state lines. My Michigan Blue Cross
Blue Shield insurance pays for medical services in Minnesota and Florida. I
doubt, however, that Michigan Blue Cross could underwrite a group policy to
cover the employees of a Florida corporation.

On the other hand, I have no doubt that the employees at the
Florida campus of Cooley Law School are covered by Michigan Blue Cross, because
they work for a Michigan corporation.

Something like 44 states have passed the Interstate
Insurance Product Regulation Compact Act which makes them part of a voluntary
interstate commission that adopts standards for the regulation of insurance
companies by their respective state governments.

This cooperative effort suggests that there are ways for the
states to work together and yet retain their Tenth Amendment sovereignty over
domestic affairs. Just because the national government has the authority to
regulate interstate commerce doesn’t mean that Uncle Sam has to make all the
rules.

In 2012, we heard a lot about “Romney Care.” It was the
system of State mandated health care adopted in Massachusetts when Mitt Romney
was its Governor.

I have never heard any hew and cry for the repeal of that
law. It may or may not be a good system. What is important is the fact that the
people of Massachusetts adopted it and they can change it.

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